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Monday

On Friday all
eyes were on Bernanke as it was thought that he would lay some ground for the
FOMC meeting and decision on 13th September.Although it was said
that action was necessary to facilitate the labour markets,traders were still
unsure whether QE3 was coming or not.This week we won’t see quantitative
easing affecting our charts.

The Japanese Yen
has been strengthening and has recently caught the eyes of the Bank of Japan
and Ministry of Finance.Meanwhile,the US Dollar has been declining itself
again.The price action and low volatility still haven’t made a case for
intervention,but Bank of Japan may intervene at some point.They are known for
stealth tactics.

Examining the 2
hour frame chart above,we can see that the pair been moving sideways since the
past month.However,the past 10 days saw a significant sell-off,after which
the price has been edging lower.Currently,the pair is hovering between the
support level of 78 and the resistance level of 78.7,and it is most likely
that the price should stay here for most of the time. However,in case it
breaks the support level,a short trade could be initiated,whereas a long
trade could be executed in case the resistance level breaks.

MACD has been
moving down and sideways throughout the past week,but has stayed below 0. This
shows that there is a bearish atmosphere as the price continues to move within
the support and resistance levels.However,currently MACD is edging upwards,which may indicate signs of a weak rally – since it is still below 0.

Stochastics have
been moving upwards lately and should reach the overbought level if the pace
continues.They are likely to oscillate less than 10 times throughout the week,so they should be taken in consideration with other signs.

Since the pair
is trading sideways,one could look for signs of price oscillations.If these
oscillations become long enough,one could initiate long and short trades along
the waves.

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